South Dakota-Based DocuTAP Mines $11.9M in Series B Funding

VentureWire ,

Timothy Hay,

May 02, 2013,

(c) 2013 Dow Jones & Company, Inc.

South Dakota yielded gold back in the day to the rough-and-ready prospectors who made the journey there. But to venture capitalists prospecting for new, emerging technologies to invest in, the region has not been known to be equally generous.

Bessemer Venture Partners believes that could change, and has nothing but high hopes for Sioux Falls-based DocuTAP Inc., a software company that has flown under the radar for more than a decade, even while selling its products to many market leaders in the area of urgent care.

The firm has led an $11.9 million Series B round for DocuTAP, joined by returning investor Bluff Point Associates, Partner Steve Kraus said.

"We will go wherever we need to go to find best-in-breed software, regardless of industry, regardless of geographic location," he said. "That's DocuTAP."

Bluff Point provided the company with a $6 million Series A round just over a year ago, DocuTAP Chief Executive Eric McDonald said. He declined to give a valuation for the company.

DocuTAP is one of a growing number of companies offering software-as-a-service products to the health-care industry. But the company focuses exclusively on providers of urgent care, whose needs are different from other kinds of clinics or hospitals.

"We designed our product around urgent care," Mr. McDonald said. "The main [differentiator] is the speed of documentation in workflows. Patients come and go quickly."

The company's software offerings include products for practice management, patient registration, billing and the adoption of electronic health records, he said. It's as close to a one-stop-shop for all workplace software that an urgent-care provider is likely to find, he added.

The company also offers a range of mobile software, further setting the company apart, Mr. McDonald said.

Most rivals, he said, offer such a wide range of software to health-care providers that they are unable to drill down and specialize in a certain area, for example urgent care. Other, more direct rivals, like privately held Practice Velocity Inc., are "in catch-up mode" and not seeing quick adoption among urgent-care providers as DocuTAP is, Mr. McDonald said.

The company says that 50% of the country's market leaders in enterprise urgent care, meaning clinic chains, are using DocuTAP software today. Its customers include Urgent Care MSO LLC, Doctors Express Inc., American Family Care Inc. and other leading providers, Mr. McDonald said.

The Series B round is expected to carry the company to profitability, the CEO said.